Hey, Harford County’s Housing Market…How Low Can You Go?

If you’ve been tracking the stats for Harford County’s real estate market as closely as I’ve been, then you’re probably wondering to yourself whether or not the real estate market is starting to go through a correction. In this blog, I’m going to present to you the stats from Harford County’s real estate market in October, and then from there, I’ll give you my opinion on why the real estate market seems to be experiencing a correction.

The stat that I always go over first is the median sold price because let’s be honest, that’s what most of you came here to find out. In October, the median sold price for all homes in Harford County was $311,500; in September, the median sold price was $327,000; this means that home prices have decreased by $15,500 over the past month. I wouldn’t be too alarmed because it’s completely normal for home prices to decrease around this time of the year, even in a crazy market like this. If we go back in time, home prices in October 2020 decreased $10,000 from the previous month.

Ok, that’s enough of me yapping about home prices; let’s now take a look at what the sold price to list price ratio was in October. The reason why the sold price to list price ratio piques my interest is that it lets me know whether homes are selling for more or less than what they were listed for and is one of the many factors that helps determine whether we’re in a buyer’s market or seller’s market. If the ratio is below 100%, then homes are selling for less than the list price; if the ratio is above 100%, then homes are selling for more than the list price.

Well, the sold price to list price ratio went down a bit from being 101.5% in September to 100.6% in October, which isn’t by that much, but it shows the offers that buyers are making are not as crazy as they once were. Nonetheless, buyers on average are still making offers that are above the list price because we’re still in a very competitive market.

The next stat that I’ll be going over is months of inventory. If you ever ask a realtor, “how’s the real estate market?” the first thing that they will probably mention is how many months of inventory is available in the market. The reason months of inventory is the go-to stat to know if you want to determine the condition of a specific real estate market is that it lets us know if we’re in a buyer’s market, a seller’s market, or a balanced market. For Harford County, a buyer’s market would have more than 3 months of inventory, a seller’s market would have less than 3 months of inventory, and a balanced market would have exactly 3 months of inventory.

Well, we’re still light years away from being in a balanced market because, in October, there were 0.7 months of inventory on the market. So this means that if no more homes were added to the market and homes continued to sell at the same rate, it would only take 0.7 months until all of the homes in Harford County have been bought and sold.

Due to inventory still being critically low, homes are still selling faster than you could ever imagine. In October, the average number of days it took for a home to get sold was 13 days…now isn’t that crazy?!

The last two stats that we’re going to take a look at are the number of new listings and new pendings there were in October. Knowing these two stats is important because it tells us how much inventory we have coming in and how much inventory we have coming out.

For new listings, there were 406 that came on the market in October compared to 520 that came on the market during the same time last year, which represents a 21.9% decrease. For new pendings, there were 417 that came on the market in October compared to 454 that came on the market during the same time last year, which represents an 8.1% decrease.

You may be feeling a little nervous because a 21.9% year-over-year decrease for new listings and an 8.1% year-over-year decrease for new pendings is a hefty drop, to say the least. But just know that it’s common for there to be fewer listings and pendings around this time of the year, however they usually don’t decrease by this much.

The main reason why I think that the real estate market is starting to pull back a bit is due to buyer fatigue. Now, what exactly do I mean by buyer fatigue? Well, for the past year and a half, many buyers have made multiple offers and still have not gotten one accepted due to the low inventory and high demand. As a result of constantly losing out on homes, many buyers have decided to put a pause on their search. So now that fewer buyers are searching for a home, fewer homes are receiving multiple offers, which in turn causes the real estate market to experience a bit of a correction.

Generally speaking, Spring and Summer tend to be the best time of the year for sellers, while Fall and Winter tend to be the best time of the year for buyers. To really find out if we’re experiencing a correction in the real estate market, we’ll have to wait until Spring and Summer to see whether the real estate market continues to decrease or if it ends up increasing.

If you guys have any questions about the information I just shared with you, please let me know! Also, if you want to look at some other stats, you can do so by downloading the market report below. That’s all I have for now. I’ll see you guys next month!

Here’s the video version of this blog for all of my visual learners! <3